Actualy the new n-gauge is actualy pretty good, and there are some good games on it now. Nokia finaly found it's nich which is stragety game.
I have a DS and like it, but there aren't any remarkable game for it right now, though by the end of the year there will be. It also plays GBA games, which is one of the reasons I bought one.
PSP is $100 more then the DS and will have more games at or near launch then the DS. The graphics on it are about as good as the PS2s, maybe better. The down side is that there is an intentional design flaw where the square button sticks and is sometimes unresponsive. This was done becsaue the button trigger couldn't fit under or near the screen so it's offset.
Unlike the DS, the PSP is designed to me more of a traditional console in function while the DS is part of nintendos "style over power" pholosphy. Both the DS and the new colnsole, revolution, aren't designed to be power houses, but be unique in how their games work and to be different then traditional console gameing.